Asset Price Bubbles: A Selective Survey

February 21, 2013

Preview Citation

Format: Chicago

Anna Scherbina. Asset Price Bubbles: A Selective Survey, (USA: International Monetary Fund, 2013) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Why do asset price bubbles continue to appear in various markets? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions. Unlike the standard rational models, the new literature is able to model the common characteristics of historical bubble episodes and offer insights for how bubbles are initiated and sustained, the reasons they burst, and why arbitrage forces do not routinely step in to squash them. The latest U.S. real estate bubble is described in the context of this literature.

Subject: Asset bubbles, Asset prices, Financial crises, Financial institutions, Housing prices, Inflation, Prices, Real estate prices, Stocks

Keywords: Asset bubbles, Asset prices, Bubble asset, Bubbles, Discount rate, Equilibrium price, Europe, Fair value, Financial Crisis, Growth decrease, Housing prices, Internet bubble, Limits to Arbitrage, Long position, Market price, Overvalued asset, Paper money, Price limit, Rate of return, Real estate prices, Share price, Stocks, Subprime mortgage, WP

Publication Details

Pages:

41
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2013/045
Stock No:

WPIEA2013045
ISBN:

9781475515299
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers